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KOLKATA: Honda Siel Cars India Ltd (HSCI), a joint venture between Japan���s Honda Motor Company and Siel Ltd (a Siddharth Sriram Group company), is looking to launch a second small car with a tiny engine capacity that will be rolled out of its Rajasthan facility in the next three years.

In the immediate term, auto circles are anxiously awaiting the launch of the Honda hatchback by July 2009, which is being positioned as the first small car from the Japanese automaker.

Although Honda Siel officials are unwilling to share further details about the second small car, sources said the possibility of a sub-1 litre engine driven car is not being ruled out. Interestingly, Honda Japan manufactures cars fitted with 660cc engines under its K-series which are currently sold only in Japan.

Officials from Honda Siel said Honda Japan���s R&D facility are currently working on the small-car model which will specifically be for Indian roads. They, however, did not comment on the size of engine, but said: ���its going to be a small car with a small engine. The details have not been finalised yet.���

���Plans are to manufacture this small car which is currently at the design stage from our new plant in Rajasthan. This plant has already started the first phase of production where vehicle parts are being manufactured. In the second phase, the plant will start vehicle production during 2009,��� said Honda Siel���s marketing vice-president Jnansewar Sen said. He was in Kolkata to launch the third-generation Honda City.

Talking about the hatchback car, Mr Sen said it will be named Jazz and will be produced from its Noida factory which has a capacity to manufacture 1-lakh units. The unit in Rajasthan will initially have a capacity to manufacture 60,000 units that can be scaled up to 2 lakh with requisite investment.

Mr Sen also said that Honda Siel will have to undertake additional investments when it decides to start manufacturing the small car from Rajasthan. Commenting on the current economic scenario, Mr Sen said: ���The liquidity crisis is likely to affect car sales. Coupled with this, rise in input costs is expected to put tremendous pressure on margins.���